Turners Automotive records 33% profit
AUCKLAND: Turners Automotive Group posted a 33% gain in fullyear profit as New Zealand’s largest secondhand vehicle retailer leveraged its position to provide more finance and an expanded insurance offering.
Profit rose to $23.4 million in the 12 months ended March 31 from $17.6 million a year earlier, the Aucklandbased company said in a statement. Sales rose to $325 million from $249 million.
Turners’ insurance business was the standout, delivering a 283% gain in sales to about $47 million and a 518% gain in operating profit to $5.7 million reflecting the ‘‘step change in scale’’ from its acquisition of Autosure in late 2016 for $34 million. Finance also recorded sturdy growth — revenue up 48% to $39.7 million and operating profit up 16% to $11.7 million as the company’s loan book grew by 40% to $290 million. Its credit management business delivered largely unchanged sales of $18.7 million and an operating profit of $6.1 million.
Turners said it benefited from being an integrated automotive group.
‘‘This provides a number of advantages, from the ability to offer an endtoend customer journey and higher margin transactions in controlled channels, through to better customer relationships, diversification of earnings and a balanced mix of annuity and transactional revenue,’’ the company said.
‘‘We are pleased to deliver another year of record results and increasing value for our shareholders,’’ chairman Grant Baker said.
‘‘Kiwis love their cars, more than 1.1 million transactions took place in the last year alone, and we expect the demand for secondhand vehicles to continue, whether that be today’s internal combustion engines or the electric vehicles of the future.’’
Turners forecast pretax profit for 2019 to be in a range of $34 million to $36 million, up from $31.1 million in 2018. It will pay a final quarterly dividend of 5c a share making it 15.5c for the year, up 7% from 2017.
While automotive retail earnings grew 8% to $16.6 million in the latest year on 16% growth in revenue to $223 million, operating profit at its Buy Right Cars business fell 21%, which Turners said reflected legacy issues dealing with aged inventory. A new management team had been in place since November 2017.
Turners’ stock rose 3.8% to $3.04 and has declined 10% this year. — BusinessDesk